Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

Joel Robinson

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

The Gold Coast Planning Committee has supported the preliminary approval for the Benowa Gardens Urban Village project following an extensive community consultation and assessment process.

The proposal will now proceed to a full council vote on June 2.

The application sought approval for a masterplanned urban village on the existing Benowa Gardens Shopping Centre site, combining new housing, retail, dining, health and lifestyle amenities within a walkable, integrated precinct.&nbsp;

The proposed redevelopment includes around 413 apartments integrated above a revitalised mixed-use centre featuring a full-line supermarket of 4,000 sqm, 6,000 sqm of specialty retail and dining space across around 30 retailers, a 7,000 sqm health and wellness precinct, and roughly 9,630 sqm of office and medical suites.&nbsp;

<img alt="$1b Benowa Gardens Urban Village moves to Full Council following Planning Committee support" data-entity-type="file" data-entity-uuid="fb36ae47-80bc-45f0-9914-31b0c7b6007d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/PR26576%20Ashmore%20Road%20C4%201121%20FI.jpg?VersionId=6mRKk2uU4r67TmTt39DKGUlvFRbTVqWa" />

The broader masterplan also includes very significant traffic and transport improvements, wide pedestrian walkways, upgraded pedestrian and cycle connections, and enhanced public areas designed to create a more connected and walkable community environment.&nbsp;

Centre owner Patrick Lu said the milestone reflected months of detailed planning, technical assessment and ongoing communication with local residents, businesses, schools and stakeholders.

“We appreciate the time, consideration and care Council officers and the Planning Committee have given this proposal throughout the assessment process,” Lu said.

“We also sincerely thank the local community for engaging with us, sharing feedback and participating in the consultation process over many months.

<img alt="$1b Benowa Gardens Urban Village moves to Full Council following Planning Committee support" data-entity-type="file" data-entity-uuid="32fd1fc3-d0e6-485f-ac57-9916c9bcb818" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/PR26576%20Ashmore%20Road%20C5%201121%20FI_2.jpg?VersionId=fz8qQKDBLQ7MyFRc856Zccfbh9nFwLOe" />

“We understand projects of this scale bring questions and concerns, which is why we have worked hard to listen carefully, provide information transparently and continue refining elements of the proposal where possible.

“Our vision has always been to create a well-designed, community-focused urban village that responds to the changing needs of the Gold Coast, while delivering improved amenity, housing diversity, healthcare access and local lifestyle benefits.

“This proposal is about creating a genuine live-work-play environment where residents can access everyday services, schools, healthcare, dining, shopping and green space within walking distance, while also supporting local jobs and economic activity.”

<img alt="$1b Benowa Gardens Urban Village moves to Full Council following Planning Committee support" data-entity-type="file" data-entity-uuid="50dfbd04-590e-4fc6-983b-766880947867" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Dining%20Day%20Time%20-%20High%20Resolution.jpg?VersionId=BP7ZoKJ0DdL_8iRkkC8VVx99moICV6kg" />

Lu said the proposal had evolved significantly through consultation and technical review, particularly around traffic, pedestrian and student safety and neighbourhood connectivity.&nbsp;

Melissa Griffin, Director at Urbis, said the recommendation recognised the strategic importance of delivering more housing and services within established urban areas already supported by infrastructure.

“This proposal represents the type of thoughtful, integrated growth that planning frameworks across South-East Queensland are encouraging,” Ms Griffin said.

“The project seeks to place housing, retail, healthcare and employment opportunities together in a highly accessible location close to schools, transport and existing services.

“Importantly, the process has involved significant technical assessment and community engagement to ensure local issues and feedback were properly considered throughout the planning pathway.”

$1 billion Benowa Gardens Urban Village heads to council vote following Planning Committee support

Surfers Paradise is officially set for its first new residential development with a 45-storey skybridge connecting the two towers.

John Camilleri’s Celestino Developments has been given the green light by the Gold Coast City Council to develop its major beachfront precinct across its huge 4,000 sqm oceanfront site at <a href="https://www.apartments.com.au/new-apartments/63-79-garfield-terrace-surfers-paradise-qld-4217">63–79 Garfield Terrace</a>, just five months after its <a href="https://www.apartments.com.au/news/qld/first-look-exclusive-billionaire-winx-breeder-s-bold-two-tower-surfers-paradise-play-with-45th-storey-skybridge">submission in late 2025</a>.

The approved scheme will deliver two towers rising 55 and 48 storeys, connected by a skybridge positioned on level 45 that will house a range of resident-only wellness and entertainment spaces.

In its notice of approval, the Gold Coast City Council said the&nbsp;proposed overall built form has been designed to complement the scale, intensity and protect the adjacent amenity and surrounding streets through the use of varied setbacks, site cover and architectural elements.

<img alt="First look exclusive: Billionaire Winx breeder’s bold two-tower Surfers Paradise play with 45th-storey skybridge" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-30%20at%209.53.48%E2%80%AFAM.png?VersionId=ADyPJ_TFbJvSU9wZFOiCBnlPtgF7VWqW" />

Designed by <a href="https://www.apartments.com.au/architects/dbi">DBI</a>, the development will comprise 275 apartments across the two towers, including a mix of two-, three-, and four-bedroom residences, as well as several penthouses. The apartments will sit above a landscaped podium featuring more than 90 metres of beachfront pool frontage, private resident lawns, lounges, and wellness spaces.

DBI said the design draws heavily from the movement and form of the coastal environment, with curving balcony lines and sculpted façades intended to soften the scale of the towers while maximising ocean outlooks and passive shading outcomes.

“The project occupies a rare, uninterrupted oceanfront site and has been shaped by a design philosophy that merges architectural elegance with environmental responsiveness and a carefully curated lifestyle experience,” DBI said in planning documents submitted to the Gold Coast City Council.

The most distinctive element of the approved project is the skybridge linking the two towers at level 45. The elevated communal space is planned to include executive lounges, formal dining areas, wellness facilities, and panoramic ocean-facing outlooks.

“The skybridge enhances the identity of the development, promotes social interaction, and delivers a lifestyle experience not found elsewhere on the Gold Coast,” DBI said.

At podium level, residents will have access to a suite of resort-style amenities, including resident lounges, private dining rooms, a yoga lawn, gymnasium, plunge pools, and treatment spaces. The beachfront pool has been designed with separate lap, lounge, and children’s areas extending across the width of the site.

The project will also introduce new food and beverage offerings along the Enderley Avenue and Oceanway frontages, contributing additional activation to the beachfront precinct.

First look: Winx billionaire’s beachfront Surfers Paradise apartment development greenlit

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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Finder.com.au’s co-founder Fred Schebesta has urged Australia’s banks to become more accountable and independent.
Speaking about the Financial System Inquiry report released over the weekend, he said that we welcomes the inquiry, which makes clear that Australian banks are not even close to being globally competitive.
“Australian banks are not even close to being globally competitive in so many ways. This is insular thinking from an insular country that needs to think about actually being globally competitive for any future chance of expanding,” Fred Schebesta said.
He went on to say that Australia needs to “stop being a little island”.
“Start earning profits not just from Australia but from all around the world. Australia could become the new global Switzerland of finance with global banks around the world,” he said.
“Comparatively, the Australian financial system is a joke – we’re isolated and currently pretty terrible at integration. There’s some huge risks, for example the big four banks are so similar in business structure that it’s crucial they take on more capital – if something comes along and cripples our economy, we’re going to see all four crumble in the exact same way.”
He said that the Inquiry is a wake up call for Australia with one of the main issues being a lack of transparency.
“It’s great to see that a key message from the Inquiry was the need for more transparency. It’s about time it was seriously recognised that guidance and disclosure needs to be improved, especially in general insurance,” he said.
“It’s not fair that some institutions purposefully hide who they are owned by because they don’t want people to know that they favour or conflict with the provider. Institutions need to understand that hiding their identity makes them untrustworthy to the public.”
He said that all financial and any advice from comparison sites, brokers, financial institutions and others in Australia should disclose their ownership structure. He also said that more disclosure around pricing is necessary.
“This will give consumers a much clearer perspective on the incentives that are driving the decisions of that entity,” explained Schebesta.
“I think consumers will start getting more independent advice which will mean better financial outcomes for Australians.”
You can read <a href="/expert-insights/finance/how-mortgage-comparison-websites-make-money">Property Observer’s analysis of how comparison websites make money here</a>.
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Australian financial system is “a joke”: Finder.com.au

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Is Australia is having a property boom? If so, no one's told the owners of these 10 homes.
Some have had their prices slashed by more than $1 million. Others have been waiting patiently on the market for years.
According to SQM Research, these are the 10 most discounted homes in Australia.
Overvalued or underloved? You be the judge.
<a href="https://www.realestate.com.au/property-house-tas-ranelagh-113279035" target="_blank"><img src="/images/2014/07/04/yellow-one.jpg" alt="">2 Louisa Street, Ranelagh, Tasmania</a>
<img src="/images/2014/12/04/discounted%20list.jpg" alt="">
Clifton, a heritage circa 1865 property, has been on the market for 622 days. Its asking price has halved in that time, from $2 million to $995,000.
The mixed use property has a 25 bed main residence, with two separate cottages. It has at times been used as a farming enterprise and as a bed and breakfast.
<a href="https://www.realestate.com.au/property-residential+land-wa-watermans+bay-200498923" target="_blank"><img src="/images/2014/07/04/yellow-two.jpg" alt="">63 Flora Terrace, Watermans Bay, Western Australia</a>
<img src="/images/2014/12/10/image2.jpg" alt="">
This double title Watermans Bay property was initially listed for $1.45 million, but is now priced at $825,000. A house sits on the 1,012 square metre plot.
It's rented out for $600 per week, representing a yield of 3.7% at its current asking price. Subdivision plans are available on request. <a href="https://www.realestate.com.au/property-acreage+semi+rural-qld-rochedale-114981059" target="_blank"> <img src="/images/2014/07/04/yellow-three.jpg" alt="">948 Priestdale Street, Rochedale, Queensland</a>
<img src="/images/2014/12/04/2.jpg" alt="">
 A 20 paddock rural property, 948 Priestdale street has been on the market for 420 days. When first listed for sale, it had a $2.8 million price guidance.
Now, it's listed 41% lower, at $1.65 million. The property includes a three bedroom main house, multiple sheds and barns.
 <a href="https://www.realestate.com.au/property-house-tas-wattle+grove-116035107" target="_blank"><img src="/images/2014/07/04/yellow-four.jpg" alt="">78 Walters Road, Wattle Grove, Tasmania</a>
<img src="/images/2014/11/26/1.jpg" alt=""> This two titled property on 10 acres is listed at $685,000, 40% down from its initial price guidance of $1.15 million.
The property with a three bedroom, two bathroom house and a separate two bedroom cottage has been on the market for 282 days.
<a href="https://www.realestate.com.au/property-residential+land-wa-carabooda-200627671" target="_blank"><img src="/images/2014/07/04/yellow-five.jpg" alt="">292 Carabooda Road, Carabooda, Western Australia</a>
<img src="/images/2014/10/1/1.jpg" alt=""> One of two Carabooda properties on the top 10 discount list, 292 Carabooda Road has seen its price chopped by 37% in its 475 days on the market. The 7.1 hectare farm was first listed at $1.65 million, but vendors will now take $1,032,000.
The farm has a three bedroom cottage with a double garage on site.
This article continues on the next page. Please click below.
<a href="https://www.realestateview.com.au/Real-Estate/28a-malsbury-street-bicton/Property-Details-buy-residential-7962768" target="_blank"></a>
<hr class="system-pagebreak">
<a href="https://www.realestateview.com.au/Real-Estate/28a-malsbury-street-bicton/Property-Details-buy-residential-7962768" target="_blank"><img src="/images/2014/07/04/yellow-six.jpg" alt="">28a Malsbury Street, Bicton, Western Australia</a>
<img src="/images/2014/11/26/image3.jpg" alt=""> This West Australian property has also had a 37% price cut. Its similarities with 292 Carabooda Road end there. This Bicton strata unit has two bedrooms and one bathroom has seen a $450,000 price cut, from $1.5 million to $950,000.
It's rented out for $480 a week, representing a 2.6% yield at its current asking price.
<a href="https://www.realestate.com.au/property-house-tas-battery+point-108230936" target="_blank"><img src="/images/2014/07/04/yellow-seven.jpg" alt="">1/23 Albuera Street, Battery Point, Tasmania</a> <img src="/images/2014/07/09/6.jpg" alt=""> A luxury ground floor apartment in a former school house is listed at $1.4 million. Initially, it was listed a $2.2 million, more than three years ago. The timber-floored apartment has three double bedrooms. <a href="https://www.realestate.com.au/property-house-sa-mawson+lakes-113369071" target="_blank"><img src="/images/2014/07/04/yellow-eight.jpg" alt="">35 The Walk, Mawson Lakes, South Australia</a> <img src="/images/2014/12/10/mawsons%20lakes.jpg" alt=""> The most discounted home in South Australia is a four bedroom, three bathroom house in the new residential development of Mawson Lakes.
The house with a "commanding street presence" has decorated 10 foot ceilings and a lot of columns. It's been on the market for 588 days, and was initially listed at $1.8 million. Vendors will now take $1.15 million.
<a href="https://www.realestateview.com.au/Real-Estate/2-wellington-street-richmond/Property-Details-buy-residential-6093682" target="_blank"><img src="/images/2014/07/04/yellow-nine.jpg" alt="">2 Wellington Street, Richmond, Tasmania</a>
<img src="/images/2014/07/09/2.jpg" alt=""> Vendors have been trying to sell Mill House, a historic Tasmanian estate, for more than a year. In that time, its price has dropped by $1 million, from $2.8 million to $1.8 million.
The 3,450 square metre estate has a four bedroom, four bathroom main house, with a separate cottage. The buildings include convict laid brick walls.
<a href="https://www.realestate.com.au/property-house-wa-carabooda-114289451" target="_blank"><img src="/images/2014/07/04/yellow-ten.jpg" alt="">219 Bernard Road North, Carabooda, Western Australia</a>
<img src="/images/2014/10/1/2.jpg" alt="">
This Carabooda home is now listed for $2,727,000, 35% down from its initial price guidance of $3.5 million. The 15 hectare farm shares a listing agent with its Carabooda cousin further up on the discount list.
The property includes two houses, one described as being "in disrepair".
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jrichardson-uRX5hFdKfN

Overvalued or underloved? The country’s most discounted homes

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GUEST OBSERVATION
Having enjoyed continuously increasing prosperity since the Second World War, Australians have come to expect that each generation will live a better life than the last.
But this steady progress may be at risk. As shown in Grattan Institute’s latest report <a href="https://grattan.edu.au/">The wealth of generations</a>, today’s young Australians may end up with lower living standards than their parents at the same age.
Young Australians will bear the costs of fiscal decisions made by past and present governments. The cost of rising government spending on older households and repaying government debt will fall most heavily on today’s young.
Younger Australians have always been net contributors to the budget. Under the generational bargain, people of working age pay more in taxes than they receive in government benefits and services. They then become net takers from the budget in retirement. Strong income growth allowed each generation to take out more from the budget that they put in. But the generational bargain is now at risk.
Many expect incomes will rise more slowly in coming decades, making transfers to older households less affordable. Affordability concerns are compounded by the growing size of net benefits received by older Australians. In 2010, governments spent A$9400 more per household headed by someone above 65 than they did in 2004.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/66722/width668/image-20141209-32162-12u017d.jpg" alt="">
This increase in net benefits for older households was a result of increased spending on health, higher Age Pension payments and lower income taxes.
Spending on pensions increased most with the Howard government’s changes to the pension asset test and the Rudd government’s 10% increase in the base pension rate. On the tax side, concessional superannuation tax arrangements now allow individuals above 60 to materially reduce their income tax liability, by up to $5000 a year. The <a href="https://www.ato.gov.au/Calculators-and-tools/Senior-Australians---pensioner-tax-offset/">seniors and pensioners tax offset</a> can also reduce tax payable by up to $1600.
Spending on health has risen particularly fast. Health spending per person has increased for all age groups but it increased most in dollar terms for those above 60. Increased use of services, rather than population ageing has been the main driver. For example, technological improvements allow more medical procedures to be performed safely and successfully on those who are older.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/66723/width668/image-20141209-32146-vmgi8e.jpg" alt="">
Population ageing will magnify the cost of growing transfers to older households. As the baby boomer generation reaches the “draw down” phase of the generational bargain, Age Pension and government health spending will substantially increase. For example, the Productivity Commission estimates that state and Commonwealth government health spending will increase from 6.5% of GDP in 2011-12 to almost 11% in 2059-60.
Over the last six years, the increased spending on older households was funded through deficits. The cost of the increase in payments to households above 65 was about $22 billion a year. This was a substantial contribution to Commonwealth budget deficits which have exceeded $40 billion per year for four of the last five years.
The cost of these deficits will be worn by younger generations. To repay the accumulated debt, they will pay higher taxes or receive fewer government services. An annual deficit of $40 billion a year implies an additional future tax burden of around $10,000 for each younger household.
<h3>Prevention is better than cure</h3>
Government policy choices have contributed to the size of the future burden on young Australians. Other policy choices would reduce the risk of the next generation being worse off.
Targeting the Age Pension, reducing superannuation tax concessions and increasing asset taxes (such as taxes on land) could reduce the transfers between today’s younger taxpayers and older retirees. These reforms would fall most on those who have benefited from government largesse and paying lower taxes while deficits accumulated.
These reforms would also significantly contribute to solving government budget problems. Even if all the Commonwealth government’s stalled budget reforms were passed, they will be nothing like enough to bridge the budget gap. Larger scale tax and spending reforms are needed.
If government expenditures on health, pensions and superannuation concessions are cut because budgets cannot sustain them, this will also disadvantage younger Australians. Younger generations, on the wrong side of the drawbridge after the policies change, will have paid for benefits they will never get to enjoy. This strengthens the case for reforming these policies sooner rather than later, and limiting the scope of “grandfathering” provisions.
The generational bargain has served Australia well. Yet it will be undermined if some generations are asked to do more than their fair share. Reforms to pensions, superannuation tax concessions and asset taxation are needed to ensure the sustainability and fairness of the tax and transfer system. Without them, there is a real risk that our children and grandchildren will not enjoy the fruits of Australia’s prosperity as much as their parents.
John Daley is chief executive officer at Grattan Institute.
Danielle Wood is fellow, Australian Perspectives at Grattan Institute.
<img src="https://counter.theconversation.edu.au/content/35250/count.gif" alt="The Conversation" width="1" height="1">This article was originally published on <a href="https://theconversation.com" style="line-height: 1.3em;">The Conversation</a>.
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po-LsXgBTHBmX

Young Australians set to pay for government policy mistakes

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Recently, the House of Representatives Economic Committee Report on Foreign Investment in Residential Real Estate was released.
The report made 12 key recommendations, one of which was better funding of the Foreign Investment Review Board (FIRB), because currently there is a complete lack of creditable information on the true extent and nature of foreign investment into residential property. As might be expected the report has received a mixed response. It has not been welcomed by the majority of public comments posted on various news websites.
Let’s examine some of the background that led to the committee looking at this area of policy. In a recent post I noted that the local housing construction industry was worth almost $70 billion, employing some 1,037,412 people in 2014. When talking about foreign buyers and residential property I use these figures as a starting point to help illustrate how important this sector is as a driver of our economy, and it’s a point that was repeated in Friday’s report.
The role of foreign investment in our market can be an emotional subject, and it remains so. It is also a very complex issue for a country with a growing population and a somewhat mixed economic outlook.
The Plight of First Time Buyers
There has been clear evidence for some months now that first time buyers are being squeezed out of the housing market. Australian Bureau of Statistics (ABS) finance statistics show that in September 2009 first time buyer finance stood at 26.1%, by September 2010 that figure had fallen to 15.5%. In the most recent ABS figures there was a slight increase but the figure is now down to 12.0%, and the average loan has increased to $326,500, which in the Sydney market would not stretch that far.
Also, in the most recent ABS figures, investment finance for the month grew by 1.7% and owner occupier finance only grew by 0.1%, and this continues a long-term trend. The reasons for these trends are very complex, but on the surface, they do create an emotional picture of the plight of some sections of the housing market.
The emotion is partly illustrated by a <a href="https://www.change.org/p/the-executive-members-toughen-the-regulations-for-foreign-investment-in-australia" target="_blank">current online petition</a> posted on change.org. The petition started in response to the Economics Committee’s review which called on the Federal Government to "toughen the regulations for Foreign Investment in Australia". It attracted some 32,300 supporters (signatures) and a wide variety of mainly sympathetic followers. A key element of the petition was the fact that only 33 of the reported 5000 sales of established homes to foreign buyers over recent years have been investigated by the FIRB.
That’s a very small number and so, understandably, it makes the FIRB rules an easy target. However figures from the FIRB show that in the first nine months of the last financial year foreign residential property investment was $24.8 billion – a 44% increase over the amount approved for the whole of the 2012-13 financial year, which only further points to the fact that the FIRB may be under-resourced.
In the report the committee also made reference to these figures and agreed the FIRB was not doing an acceptable job, which it recommends be fixed.
The petition and the concerns of its sponsor (Simon Hosking) had been brought to the attention of Kelly O’Dwyer, Federal Member for Higgins and Committee Chair of the Parliamentary Business Committee’s House Economics Foreign Investment in real estate. In part of her response, published on the petition’s website and issued ahead of the main report, O'Dwyer states:
“… The Committee is taking a holistic approach to examine whether the current policy settings are delivering the best outcomes for the Australian economy and increasing housing availability, as they are designed to do. Australia’s foreign investment policy, as it applies to residential property, is intended to boost the supply of new housing and thus provide both economic and social benefits. The policy seeks to channel foreign investment in the housing sector into activity that directly increases the supply of new housing (such as new developments of house and land, home units and townhouses) and brings benefits to the local building industry and its suppliers…”
 This article continues on the next page. Please click below.
<hr class="system-pagebreak">
Blame game or market reality
The debate around foreign investment in residential property comes at a time when prices and demand have both been increasing, a very obvious trend in Sydney and Melbourne and to a lesser extent in Brisbane and other centres. These cities are also attracting the bulk of foreign buyers and foreign development capital and investment.
In part, the trend is being ‘blamed’ for higher prices and at one end of the market. That blame extends to the trend locking first time buyers out of the market.
Again, ahead of the main report, here’s what Committee Chair Kelly O’Dwyer said in response to the Simon Hosking petition. The  same views were reinforced in the main report:
“…Consistent with this principle, foreign investors are able to seek approval to purchase new dwellings and vacant land for residential development. Foreign investors cannot generally buy established dwellings as investment properties or homes; however, temporary residents can apply to purchase one established dwelling to use as their residence while in Australia. The acquisition of residential real estate by foreign investors is regulated by the Foreign Investment Review Board (FIRB). It has become clear from evidence presented to the Committee that FIRB has not prosecuted a single case since 2006. It is also clear that there are problems with processes at FIRB, resources and the penalty regime. The Committee is due to report later in the year…”
However only last week ahead of Friday’s report, this same committee knocked back a proposal that foreign property buyers be levied an extra stamp duty as a possible way of helping to fix the housing affordability crisis, and dampen offshore demand.
There seems to be a fairly entrenched ‘hands-off’ approach being adopted, although a purchase application fee of $1500, that would raise $158.7 million over four years, appears to have general support. Such a fee would by no means act as a penalty.
Returning to the idea that foreign investment is somehow having a negative impact on the market (by forcing up prices), I think we should also look at how different the Australian economy has become over the past two decades.
Because the housing market is part of a big picture and it has to be seen in the wider context. The importance of direct foreign investment across our economy is illustrated by the fact that in 1990 Direct Inward Investment Stocks was US$80,333 million, however, in 2012 that figure had grown to US$604,257 million. Over the same period Australia’s outward flow of Direct Investment Stocks has grown from US$37,491 million to US$424,489 million. I quote the figures to illustrate the fact that the international flow of investment funds is a fundamental to any economy.
The rush to secure Free Trade Agreements is further evidence of this fact. Last week Australia and China signed an FTA, and it is yet to been seen if this will have any impact on the flow of funds into residential property both buying existing projects and for new developments, and if this will be a positive or not for the market.
On first reading of the China/Australia Free Trade Agreement, because of the freeing up of many of the service sectors, this may well be a positive for Sydney and Melbourne, because these two cities are so closely aligned to the professional services. Law, finance, education, tourism, health, engineering and manufacturing are all seen as having potential benefits and growth in these areas plus other key areas should create more demand for commercial and residential accommodation in Sydney and other cities.
However, again illustrating how emotional this topic has become, there are suggestions that the various free trade agreements will further harm the prospects of ‘local’ would be home-buyers. But I do not see any foundation for this assumption.
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pchittenden-eLqUUC8TWW

The housing market and foreign buyers: A blame game

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A new forecasting report from Colliers International has predicted ongoing growth in Sydney, Melbourne and Brisbane through 2015, particularly with investor sentiment expected to remain strong.
Peter Chittenden, Colliers International managing director – residential, explained in the Colliers 2015 Asia Pacific Property Outlook that low interest rates will attract first home buyers and investors.
“The outlook for interest rates is mixed, but headline indicators such as unemployment, construction activity and GDP point to a period of weaker overall economic growth which will result in interest rates remaining steady in the short to medium term,” he said, noting that it will be good news for residential property and will continue demand momentum.
Supportive conditions in 2015 for investment are expected to continue.
“Sydney, Melbourne and Brisbane residential markets will have the strongest residential growth, as weaker economic conditions in Western Australia will lead to a slowdown in development and investment activity in 2015,” said Chittenden.
Meanwhile, developments in central areas, near public transport, work and retail hubs will remain in high demand.
Chittenden expects that infill apartment developments will continue to grow next year, particularly with state and local government infill policies contributing to developers flocking into the CBD and inner suburbs in Brisbane, Sydney and Melbourne.
“This is evident in the volume of new apartments being developed and approved by local councils, and the strong growth in development site values,” he said.
“The Melbourne and Sydney CBDs have been the strongest performing markets, with the volume of apartments under construction in the next five years to reach and 18,000 and 6,000 respectively, buoyed by strong offshore demand, and a rapidly rising inner city population, a trend we anticipate will continue in 2015," said Chittenden.
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Sydney, Melbourne and Brisbane are still cities to watch in 2015: Colliers International

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The penthouse in the landmark 1888 Biltmore, Albert Park building has been sold for $4.55 million by the so-called Saatchis of street art, edgy art collectors Sandra Powell and Andrew King.
It last sold at around $2.85 million in 2005 from the de Campo family who undertook the building's conversion from hotel premises.
It has majestic verandah archways and its interiors have 16 foot ceilings designed by architect Walter S. Law, who also designed Drummond Terrace and Medley Hall, Carlton.
One of the original streets of the 1855 Emerald Hill town plan, Bridport Street had developed slowly from the 1860s accompanied by the construction of the new railway cutting in 1857, but with a fillip with the new cable tram route in 1890.
The 40-room building was built in the free classical style as the Albert Park Coffee Palace, one of dozens of coffee palaces, part of the temperance movement, alcohol-free alternative to the public house.
The imposing four storey building with arcaded loggias became a private hotel in 1928. In the 1950s it was sold to the Royal Melbourne Hospital and used as a nurses' home, before reverting back to a private hotel in the mid-1960s.
It was refurbished and subdivided into 12 apartments in the mid-1990s.
It has majestic verandah archways and its interiors have 16 foot ceilings.
The four bedroom, three bathroom apartment comes with pool, spa and two basement carparks.
Cayzer Real Estate Albert Park agents Geoff Cayser and Michael Szulc had the listing.
Since its sale it has become available as a $3000 a week rental through <a href="https://www.domain.com.au/property/for-rent/apartment-unit-flat/vic/albert-park/?adid=9382853" target="_blank">Kay &amp; Burton</a> along with <a href="https://www.domain.com.au/property/for-rent/apartment-unit-flat/vic/albert-park/?adid=9368579" target="_blank">Cayzer</a>.
It was a $2000 a week rental in 2008.
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jchancellor-FAypfDUnLy

Biltmore, Albert Park penthouse $3000 a week rental after $4.55 million sale

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Investment decisions in property are often presented as choices between yield and capital gains. In Melbourne, there is a small selection of suburbs where both objectives can be met; they have above average capital gains and a yield higher than the citywide one.
As past performance is not a guarantee of future performance in the property market these are not suburbs investors should automatically buy into, rather it shows that with some astute property hunting strong investment outcomes may be found.
Over the past decade the compounding annual growth rate for a house in Melbourne was 5.77% and 5.16% for a unit. The gross rental yield over the last year for a house was 3.6% and 4.1% for a unit.
In the unit market there were 34 suburbs that recorded capital growth and with yields in excess of the citywide outcome, and five of those stood out. In the market for houses there were 33 suburbs.
The five standouts in the unit market, predominantly because of reasonable sales volumes providing opportunities for buyers, were <a href="/news">Ferntree Gully</a>, <a href="/news">Brunswick West</a>, <a href="/news">Chelsea</a>, <a href="/news">Mount Martha</a> and <a href="/news">Boronia</a>.
In the market for houses the five that stood out were <a href="/news">Bayswater</a>, <a href="/news">Altona North</a>, Boronia, <a href="/news">Collingwood</a> and <a href="/news">Mooroolbark</a>.
In it interesting to note that many suburbs in the outer eastern suburbs, around the base of Mount Dandenong, have recorded above average yields and capital gains over the past decade.
The other area of Melbourne that has multiple suburbs with good capital gains and yield is in the inner east.
Obviously the skill for an investor is not just finding the right suburb but the right property and that can take time and requires both research and a strong understanding of the local market.
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rlarocca-zWhvjay44N

The Melbourne suburbs offering both yields and capital gains

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Brisbane's year of recovery and the ongoing struggle of the Gold Coast unit market are standout features of the latest quarterly Market Monitor from the Real Estate Institute of Queensland.
Also noteworthy are the solid 2014 performances of regional cities Toowoomba, Cairns and the Sunshine Coast.
Despite the general uplift in market activity on the Gold Coast, the unit market is still struggling to recover from the oversupply years in terms of prices.
The Gold Coast's median unit price up 4.4% in annual terms, but still 2% below the price levels of five years earlier, according to Market Monitor.
Specific markets have yet to move into positive territory on prices. The median unit price for Surfers Paradise is 4.2% lower than a year ago and it remains 6.3% below the level of five years ago.
Broadbeach has dropped 1.7% in 12 months and remains 3.8% lower than in 2009. Main Beach has shown a 0.9% annual rise, but is still 6.7% below the price levels of five years ago.
It's a more positive story in the housing market. Most housing suburbs have recorded annual growth in median prices, double-digit growth in a few cases – and most, though not all, now have price levels above those of five years earlier.
This tallies with the trend we've notice with sales levels. There's been a steady rise in sales activity in many of inland housing market on the Gold Coast over the past 12-18 months. Prices have reacted more recently.
Another Queensland icon Noosa continues to struggle. The unit market in the Noosa LGA has dropped 1.3% in 12 months and price levels remain 7% lower than in 2009.
The suburb of Noosa Heads is still a basket case, despite the rhetoric of local agents. The median unit price dropped 12% in the past 12 months and is 29% lower than five years earlier.
This is why we refer to Noosa Heads as the biggest lemon in Australian real estate. How did this place ever get its lofty reputation with investors?
Our previous comments about the need for caution in the Brisbane inner-city unit market appear to be reflected in price data in Market Monitor. The median apartment price for the Brisbane CBD fell 10.1% in the September Quarter. Others to record quarterly decline were Kangaroo Point (down 8%), Woolloongabba (2.5%), West End (13%) and Fortitude Valley (7%).
The result for the wider Brisbane City local government area was better, with a 0.6% quarterly rise and a 5% annual rise in the median unit price.
Houses generally are doing much better. The median house price for the Brisbane City Council area rose 8.7% in 12 months, including a 1% rise in the September Quarter.
Many of the better individual performers - suburbs that out-performed the city average – are in the northside areas of Brisbane City, including Chermside (up 13%), Kedron (up 15%), Sandgate (up 12%) and Stafford (up 15%).
The more distant reaches of the Brisbane metropolitan area are showing some life, with annual growth in median house prices in Logan City (up 4.5%), Moreton Bay (up 4%) and Ipswich City (up 3.2%). I'm expecting bigger numbers from these areas in 2015.
Toowoomba's recent solid performance is reflected in the figures. The median house price rose 1% in the quarter and 7.2% over 12 months. Price levels are now 24% higher than five years ago. Units are up 8.5% in annual terms, including a 2.5% rise in the September Quarter.
The recovery on the Sunshine Coast is also evident. The median house price rose 1.2% in the quarter and is up 6.3% in annual terms. Buderim, always the most popular housing market, has risen 7% in the past 12 months.
Cairns' revival is apparent, with house prices up 6.2% and units up 7.5%. Other places showing some spark after several poor years include the Fraser Coast, flood-affected Bundaberg and the Whitsundays, including Bowen. Townsville and Rockhampton remain sluggish.
Gladstone dropped a further 4% in the September Quarter and is 8% down on a year earlier. Mackay has taken a big hit on rentals but prices are down only moderately (3.5% in annual terms).
Isaac Shire, which includes boom-bust icon Moranbah, is down 38% in annual terms, while Emerald is down 15%.
Terry Ryder is the founder of <a href="https://hotspotting.com.au">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or contact him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter</a>.
 
 
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terryryder-YECXbqmri2

Gold Coast units still struggling, Noosa Heads still a lemon: the Queensland quarterly wrap 

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GUEST OBSERVATION
The federal budget balance is expected to deteriorate.
The reasons are numerous but, in a lengthy statement, the government sums it up in terms of two key factors. These are: the softer economic outlook; and unresolved issues inherited from the former government.
The economy is going through a transition. A decline in resources investment will be offset by a recovery in the non-resources sector. It seems the decline in resources investment may be sharper than previously forecast while the recovery in the non-resources sector may be more gradual.
Thus, with real gross domestic product growing at a slower rate, hence “a softer economic outlook”, revenue from taxation will also be less. The result is a higher budget deficit.
The previous Labor government can apparently be blamed for many “legacy” items, but one is rather curious. Our central bank, the Reserve Bank of Australia, has to receive A$8.8 billion to compensate it for losses incurred to its foreign currency reserves during the period when the Australian dollar appreciated.
The choices faced by the government
Given the deficit prospect, the government faces three choices:
<ol>
<li>Run a bigger deficit,</li>
<li>Raise taxes, or </li>
<li>Cut government spending.</li>
</ol>
The government has already embraced choice three – cut spending. With regard to choice two, it abolished the carbon tax and the minerals resource rent tax, and thus moved in the wrong direction.
Perhaps the government will cut public spending further in areas it finds attractive. After cutting funding to the CSIRO, ABC and SBS, the staff of the federal public service, and funds available to the states for health, education and transport, not to speak of the universities, there are surely more possibilities.
Incidentally, over 20 non-statutory bodies have been abolished or rationalised. The underlying (or even explicit) philosophy is to reduce the size and responsibilities of government. This is in tune with United States conservative attitudes.
What the government should consider is raising taxes rather than further spending cuts. This is a very serious proposal. Yet, compared with the US approach, it may be more in tune with traditional Australian attitudes, which expect a great deal from governments.
Why the federal government should raise taxes
To understand the argument behind the need to raise taxes, it is important to understand what can be described as Howard’s Gift.
Under the Howard government, beginning around 2003, there was a boom in the form of rising export prices of iron ore and coal. As a result, revenue from corporation tax increased sharply.
This led the Howard government to cut personal income taxes on no less than five occasions. Also, superannuation concessions were extended. The details can be found in <a href="https://www.lowyinstitute.org/publications/beyond-the-boom" target="_blank">John Edwards’ Beyond the Boom</a>.
This was John Howard’s gift to the taxpaying middle and upper classes. It was clearly a response – perhaps understandable – to the export boom.
The trouble was it had the effect of increasing budget deficits in later years when tax revenues declined. In particular, budget deficits in the Labor (Gillard) years were increased by Howard’s Gift. Even now it has an adverse effect on the government’s budget balance.
However, as the mineral export boom in the Howard years turned out to be temporary, the income tax cuts that were motivated by the boom should also be temporary. In other words, they should now be reversed.
Personal income tax rates should be increased to where they were before the boom. Usually opposition parties oppose tax increases. Prime Minister Tony Abbott ran a very effective campaign against the carbon tax when in opposition.
So this proposed tax increase needs to have bipartisan support. If Labor gets into government later, they will be glad to have a decent revenue base for their budgets.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Reform required for our tax system
At the same time some other improvements should be made to the income tax system. These ideas all come from the famous <a href="https://taxreview.treasury.gov.au/content/Content.aspx?doc=html/home.htm">Henry Report</a> on the Australian tax system.
The aim would be to simplify the system and, above all, to remove special concessions and deductions that principally benefit the better-off. These are the favourable concessions that affect the superannuation earnings of people on high incomes.
All remuneration should be measured as wages. Capital gains tax rate concessions and various concessions available to primary producers should also be removed.
In addition to increasing income tax rates to their earlier levels, more revenue needs to be obtained from the GST. This tax has to rise if sufficients funds are to be generated for the states’ vital functions.
There is no doubt the GST is a relatively efficient tax, but it would be more efficient and easier to collect if goods and services of all kinds faced the same GST rate. Exemptions should be avoided and, probably, the rate increased closer to comparable international rates.
However, the real problem with broadening the GST or raising the rate has to do with equity. This tax is a bigger burden for persons with low incomes than for the well-off. But equity within society is more effectively achieved with a progressive income tax and social security system than through exemptions from the GST. This means that some of the GST revenue gain should be returned to households in the form of increased social security payments and a more progressive personal income tax schedule.
It is clear that Australia’s entire taxation system needs major improvements. This is clearly shown in the Henry Report, which is a valuable guide for reform.
No doubt these matters will be discussed in the government’s prospective white paper on taxation. The government needs to raise more revenue while making limited improvements to income tax and the GST. The basic aim, above all, should be to avoid further damaging government spending cuts.
And what about a recession?
The government believes there is a “softer economic outlook”, which means we might face a recession. It is impossible to predict at this time whether this will happen. However, if there is any possibility of a recession, then it is not the time to cut government spending nor to raise taxes.
However, the government does need to implement long-term structural reform of the tax system and expand its revenue base. In the face of a recession, the RBA will need to lower interest rates and stimulate the economy and also depreciate the Australian dollar. Such stimulus would, as a by-product, partly reduce the budget deficit.
Max Corden is professorial fellow in the department of economics at University of Melbourne.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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Australia needs higher taxes, not spending cuts

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Quantity surveyors Washington Brown are warning investors not to get carried away with that holiday feeling this summer.
Over the holiday period many investors can fall into the romance of owning their own private get away. But Washington Brown says to tread carefully.
Holiday properties can be an enticing investment. Victoria’s coastal town of <a href="/news">Torquay</a> has a median house price of $617,000 and a median rental price of $400 per week, according to Core Logic RP Data.
Washington Brown says when buying a property, the ‘we have got to have it and we will make it work’ compulsion is natural. After purchase costs such as renovations and furnishing can build up and before you know it, you may have spent over $1 million on your new holiday property.
Quantity surveyor and depreciation expert Tyron Hyde says that there are way around spending a lot of time and money on holiday properties.
“Holiday houses can be depreciated if they are rented out to a third party,” said Hyde.
This stops you from staying at the house whenever you want.
“As long as it’s available for rent most of the year you can block out a two week period over Christmas and claim the depreciation pro rata,” Hyde said.
“You are still entitled to that deduction regardless of how many weeks the property is actually rented out as long as it was available for the full 50 weeks.”
“I’m seeing many clients buy holiday homes at close to, or less than the construction cost and if you furnish your holiday home, you’ll magnify the deductions.”
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Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

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